Influence and Persuasion – Commentary #1

Just some of the opinions I have regarding the readings this week

Before the year 2000, organizations like Apple, Pepsi and Coke used television and newspaper as the primary medium for advertising their products. They relied heavily on the 30 second commercial for creating the brand awareness. Ever since the advent of Internet, these companies have migrated to different channels for advertising. They have started employing nudges to attract more customers online. In this blog, I would be focusing on how nudges created and used by companies like Amazon, Google, and Facebook to generate revenue are invading the privacy of the users.

In 2004, Google launched its email service called ‘Gmail’. Gmail became one of the most popular and widely used email services across the world. Though it is a free service, Gmail became one of the most important apps for Google as it generated a lot of revenue through ads. This email service gathers data regarding the sites that you have visited. They also display ads that are extremely relevant to your current needs. For instance, if you just now received a mail from your friend regarding vacation in California, they display hotel’s ad as a text. This text will be placed right on the top of your inbox so that it is visible to you when you are checking your emails. By placing a relevant ad on the top, you are most likely to click on the link [1]. How do they display relevant ads in Gmail? Google reads all the emails present in your inbox and then displays an ad based on the email’s content. When you click on the ad, Google will receive the money from the advertiser.

Apart from Google, e-commerce websites like Amazon track the websites and products that you have searched so far. When a person logs into Amazon, it will recommend products based on the data they have collected relevant to search preferences. Apart from the shopping history, these companies also recommend products that are specific to your location [2]. Social networking websites like Facebook employ a different type of tactic. Apart from gathering location details, they also keep track of the pages that your friends like. If your friends like a particular product on Facebook say a restaurant in your location, Facebook will display ‘ABC and 5 others like this’ on news feed where most of your attention would be. By displaying that, you are most likely to check out what your friends have bought (social proof). If they have liked a restaurant, you are most likely to try it out.

After collecting the data, these organizations are not going to delete them. For instance, Google or Amazon will not delete your history from their servers. They are going to build on top of that and learn more about you using latest technologies. Is it safe? I think the data will be stored safely. However, there have been many instances of security breach. For instance, TJX, a shopping store, had all of the data about their users stored insecurely in their servers. Anonymous hackers hacked their store’s account and made them public [3]. Is it ethical to collect information about a user? I personally feel that it’s not ethical to collect data about you without your permission and use them for creating nudges. As discussed in the ‘Privacy Nudging’ lecture, a person can use the App Permission manager in Android to prevent apps from collecting information about you. The users can also make use of ad blockers or incognito mode for browsing using desktop. So what do you guys think? Do you think this is an ethical way of creating nudges? Please feel free to comment on this topic.

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You mentioned that “nudges created and used by companies like Amazon, Google, and Facebook to generate revenue are invading the privacy of the users”. Can you elaborate on the nudges used by said companies? In the case of Gmail, you mentioned Google “places a relevant on the top”, but I think that would be tough to qualify as nudging since it lacks a user objective.

What I think would be more evident is Facebook. Every so often, Facebook will notify you on the site to do a Privacy Checkup[1] which prevents users from sharing information that they don’t intend to. Before, the privacy settings were deeply embedded in the bowels of Facebook that people do not make sure they are correctly set the way they want it to be. With this tool, more Facebook users are nudged into adjusting their privacy settings, which is a step in the right direction privacy-wise after their privacy brouhaha a year ago.

You mentioned in your views that “it’s not ethical to collect data about you without your permission and use them for creating nudges”. You gave the example of Android apps collecting unnecessary information. At this point, I am pretty confused about what your a nudge entails. Does showing an advertisement to a user constitutes a nudge? Personally I don’t think so. Sunstein defines it as anything that influences our choices that leads to *improvements* in the rationality of decisions people make. Such nudges are informed by the findings of behavioural economics.

“There is an app for everything”, so much so that Apple has trademarked the quote for their advertising campaigns. If one looks at majority of the apps developed, especially the ones using the open data from the US government, one can see that they are variations of a standard set of applications that help with credit processing, medical aid, tax filing, bill payments and so forth. This is understandable as these applications are used a lot by the public and there is the incentive for a third party to monetize through ads. Seeing the success story of one such company motivates other players to enter the domain. But how does one persuade someone to use your data for the public good?

The flaw in this model is that it takes a very long time for some player to enter into the niche markets (by niche, I mean the agencies that are not targeted by most of the third parties – Center for Dietary Studies for example), and more often than not, it does not address what the niche community might want. To encourage diversity of applications for government agencies, the US government spawned the idea of Challenge.gov. Challenge.gov is a technical platform and list of challenge and prize competitions, all of which are run by more than 80 agencies across federal government. These include technical, scientific, ideation, and creative competitions where the U.S. government seeks innovative solutions from the public, bringing the best ideas and talent together to solve mission-centric problems. This platform is available at no cost to all federal agencies to help them list their challenge and prize competitions and learn how to engage the public through this innovative approach. To read more on this – https://www.challenge.gov/about/

This approach succeeded in persuading and motivating people to create solutions that leveraged the organization’s data and create solutions specific to the target audience. Crowdsourcing the solution helped in alleviating costs for the organization and incentives persuaded the public to respond. Since this is backed by the US government, it prompted a lot of response to every government agency posting a challenge on the platform – https://www.challenge.gov/success-stories/

We can see some of the techniques we learnt in class at play. We can see Authority at play here. Since this backed by the US Government and not just any other organization, people tend to take notice and participate in the challenges more than what a standalone organization could have achieved. Also we see the role of Reciprocity at play. Incentives for creating the solution outweigh the efforts needed to put in and thus people are motivated to contribute.

I believe that Challenge.gov is a great example of influencing and persuading third party to contribute more to projects without looking for monetization through the market. A non – profit organization for example can tie up with a well- known commercial company and organize hackathons to get the solution that they want – check out – http://www.hackingeatingtracking.org/, where this organization partnered with Harvard Med School and other big players to come up with innovative solutions for their problems.

So what do you guys think? Is latching on to big fry to promote our interests a good way to persuade someone? Looking forward to seeing your comments.

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You mentioned that the name cachet afforded by the US Government led to more active participation. Perhaps the monetary prizes have a significant role in motivating involvement? Just something to think about.

As to your question if getting ‘big fry’ to promote your interests is effective or not, it all depends on what you mean by effective. If you mean performance-per-cost effectiveness, there have been studies that show otherwise. [1] This paper can be distilled into a few main points: 1) influence to difficult to measure and predict; 2) ordinary influencers might be more cost-effective than ‘big’ influencers; 3) influence works best via quantity (number of influencers) rather than quality (fame of influencers) For example, in a case study, Lady Gaga and Michelle Phan were given brand endorsements for a cosmetic product on Twitter. Even though Lady Gaga had almost 100 times more followers than Michelle Phan, it was the latter that got more clicks on the Twitter link. A possible explanation is that when your social network is smaller, it becomes more personable and hence followers are more likely to engage with your content more. As can be seen, how popular the person or company is might not be a determinant of effectiveness in influence and persuasion.